Banks call for permanent electronic mortgage applications

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on June 18, 2020
Banks call for permanent electronic mortgage applications

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Bank and housing organisations have today called on the National Cabinet to make electronic mortgage applications permanent post-COVID-19.

Many banks and lenders have introduced electronic mortgage applications, video call document witnessing, electronically-signed documents and more as temporary relief measures during COVID-19.

Now, a coalition consisting of the Australian Banking Association (ABA), the Business Council of Australia, the Australian Institute of Company Directors, Council of Small Business Organisations, the Financial Services Council, the Real Estate Institute of NSW (REINSW) and the Australian Property Institute are all calling on the National Cabinet to make such changes permanent.

 ABA chief Anna Bligh said making these measures permanent will be the way of the future.

“The onset of COVID-19 has meant fast-tracking moves right across the economy to a paperless, contactless digital way of conducting business,” Ms Bligh said.

The coalition has suggested the following changes be made permanent:

  • Allow deeds to be created and signed electronically;
  • Accept electronic signatures rather than paper signatures for a broader range of legal and business documents, including guarantees, statutory declarations and trust deeds;
  • Allow witnessing of documents to happen via audio-visual means with use of an electronic signature. Witnessing should not be required for deeds; and
  • Processing a mortgage digitally.

Many states have their own versions of an Electronic Transactions Act, which generally stipulate that transactions are not invalid simply because they are conducted electronically.

However, common law throughout the states often dictates that deeds and mortgages must be made 'in writing, on paper, parchment or vellum', as is the case in Victoria - documents are also required to be witnessed. 

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Variable
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Variable
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Then-NSW MP Victor Dominello in 2018 told Westpac Wire that in the digital world, people should not have to rush to solicitors and bankers to sign paper documents.

“Unfortunately the laws dealing with property acquisition phase are still stuck in the age of paper and ink," he said.

Then-director at Westpac Tim Roberts also said Australian technology around mortgages was "ancient" compared to other products.

Business Council of Australia chief Jennifer Westacott called on the government to "suspend outdated, unnecessary and job-killing red tape that was making it harder to do business".

“As we recover we should all ask ourselves at every step of the way, will bringing back these regulations help keep costs down for consumers or help make Australia an easier place to do business and create new jobs?” she said.

Australian Property Institute chief Amelia Hodge echoed these sentiments.

“Let’s reduce red tape and promote growth and activity in the property sector – that’s what we need from Federal and State Governments," she said.

REINSW chief Tim McKibbin said the legislative restraints on signing, witnessing and lodging documents electronically are "unjustified", while Australian Institute of Company Directors Angus Armour said these regulations are "outdated".




Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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